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The Dashed Dreams Of Generation X

August 06, 1995

International Business: JAPAN

THE DASHED DREAMS OF GENERATION X

Kiwako Mibe has been looking for work for months. The 20-year-old is among the top students at one of Tokyo's better two-year colleges, a school that a few years ago boasted a 98% employment rate for its graduates. That rate has dropped to 60%. Mibe, who graduates in March, hasn't gotten any offers yet and says she worries about the future "all the time." Of nine students in her advanced English class, only three have jobs so far.

Japan's Generation X is waking from dreams of prosperity to find their quality education no longer automatically opens doors to career employment. With Japan's economy stuck in low gear, many companies must cut payrolls and improve productivity. But with no company willing to suffer the political fallout from breaking the social contract against mass layoffs, it's easier to stop hiring. The result: More and more youngsters are staying in school longer, going to work for foreigners, or settling for part-time jobs, often in service industries.

The outlook is grim. The official unemployment rate among 15- to 24-year-olds is 5.7%, nearly twice the national average (chart). But informal studies suggest joblessness for recent grads is closer to 20%, says Dick Beason, an economist at James Capel Pacific Ltd. in Tokyo. With two jobs for every three applicants, it's the ice age of recruitment. In June, 1,500 students applied for 40 spots selling sandwiches on the bullet train's Tokyo-Osaka run. "Young people have a dismal perception of the future," says labor expert Haruo Shimada, a professor at Keio University. "They wonder if they can ever have as nice a job as their dads did."

BROKEN BACKBONE. With business slow and middle-management ranks bloated, most companies have slashed campus recruiting. In 1991, Nissan Motor Co. took on 3,626 freshman employees. Last year, it hired just 45. New hires at Sony Corp. are down 80% from the peak in 1992. Overall, new-graduate hires fell 33% in 1994 and are down 22% in 1995. "It's a suicidal course of action because the young workers who will be the backbone of the workforce in 20 years are the ones you don't want to shut out," says Chris Calderwood, senior economist at Barclays de Zoete Wedd in Tokyo.

Granted, this lost generation isn't starving. With no social stigma attached to living off parents, many young people go home again and just work part-time, saving money for travel or leisure. But for others, high hopes are evaporating. Rika Kawagoe came to Tokyo expecting to work in the fashion industry. After graduation from a design college and a fruitless search for a full-time job, she ended up a part-time clerk in a Tokyo bread shop. Last year, the 23-year-old gave up and returned north to her home in Aomori. "I'll just live the rest of my life here," she sighs, and repeats the national mantra: "It can't be helped."

Meanwhile, the once tightly woven social fabric is getting a little threadbare. Recently, a thin, nervous 20-year-old appeared on a TV game show called Devil's Whisper, palpably desperate for money. Despite two part-time jobs, he said he barely got enough to eat and couldn't pay his rent. He was about to be evicted. He couldn't go home because as part of his parents' divorce agreement, he was not allowed to be a burden to them. He won $10,000 and wept, saved from homelessness--for now.

Salvation Army surveys show the percentage of homeless in their 20s rose sharply in the past year. With no safety net, those who slip through the cracks find "it's a one-way street, and there's no turning back," says John Nestor, who coordinates a Franciscan group that works with the homeless.

Even those with "real" jobs are facing rewritten contracts. Masataka Nagata joined Nissan's international business department in 1991. Now one of 900 white-collar Nissan employees drafted into front-line sales, he was demoted to a west Tokyo dealership a year ago. Such arrangements, in which both divisions contribute to the employee's salary, are a growing part of so-called lifetime employment. While the 26-year-old has learned to enjoy sales, he hopes to get back to headquarters in Ginza when his 25-month dealership contract is up. But through transfers to affiliates and early retirements, the company is expected to slash payrolls by an additional 6,000 to 7,000 by 1998, from the present total of 49,000.

Many young people see job hunting as a humiliating process. Recently, at a government-ordered recruiting fair, some women were told they're too ugly to be hired and to stay at home to help their parents. Interviewers pose obscure questions "just to cut us out," charges Emiko Seki, a Tokyo student. At one jobs seminar, students were told anyone who wanted might take off their coats, then everyone who did so was told to leave. "It's a hell of a way to treat people," says Andrew Shipley, economist at Lehman Brothers Japan Inc.

Japan's rigid career path may soon be a road less taken. Top graduates can still find jobs at leading companies, but other highly qualified grads are opting for graduate degrees, overseas study, or even foreign employers rather than settle for lesser companies. Long viewed as risky employers, foreign companies are now attracting more qualified applicants as Japan's labor guarantees weaken. Seki is joining Hewlett-Packard Co. because it offers better opportunities for women, such as working after marriage, than do Japanese companies.

That kind of flexibility appeals to a new generation of Japanese workers, and Japanese companies are slowly adapting. Merit-based pay is becoming more common, an idea most popular with those under 30, who rightly perceive it as their only hope for advancement from under a crushing load of older workers. Companies are looking for skills and abilities rather than name-brand diplomas. Changing jobs mid-career is not so rare. While there's more risk, there's also more individual freedom. Capel's Beason says those "structural changes are dovetailing with people's preferences about jobs."

MORE PUNKS? Even that's not enough for some young people. Take Shogo Kitazawa, who has been a dishwasher and a ditch-digger. Now, the orange-haired 20-year-old, who wants to be a drummer, works from 10 a.m. to 8 p.m. six days a week, luring passersby into a rock 'n' roll accessories shop. "It's really hard to find work, but I have no desire to work for a big company--too boring," he says. "I have dreams."

Such opting out may help Japan in its sectoral shift. "That adventurous spirit is good for the future of Japan," says Hidehiko Sekizawa, executive director of the Hakuhodo Institute for Life & Living. "Some of these students will become entrepreneurs--maybe we'll even have more punk rock stars. It's tough, but they'll find their path."

Pundits with jobs proclaim these changes are necessary. "Higher unemployment is the price of flexibility in the labor market," says Calderwood. Many see the deposed as sparking the service-sector job creation the nation needs. "Ten years from now, we'll be thankful that this recession was so hard and deep," Beason says. That will likely be true for the winners, but it's going to be a rough ride for those who get written out of the social contract.By Edith Hill Updike in Tokyo